Case study of houston company

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Houston Company authorized a $1,000,000, 10-year, 6% bond issue dated July 1, 2009, with annual interest to be paid each December 31. On July 1, 2009, the bonds were issued for $886,500. Houston Company has a December 31 year-end.

A. Give the entry to record the sale of the bonds.

B. Give the required entry on December 31, 2009 to record amortization (use straight-line.)

C. Was the bond issued at par, at a discount, or at a premium?

D. Will interest expense be greater than or less than the cash payments for interest?

Reference no: EM13259677

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